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Investing in Burma? Brace for pain.

Will Southeast Asia's last frontier economy implode before it ever takes off?
Investing in burma 01 25 2012Enlarge
A Myanmar laborer undertakes renovation work at a building in downtown Yangon on January 21, 2012. (SEO THAN WIN/AFP/Getty Images)

As Western governments ramp up to the inevitable — removing heavy sanctions against Burma, officially known as Myanmar — investing in Burma may seem attractive to those who bet on emerging markets.

An authoritarian army-run regime, the world's longest running dictatorship, kept Burma closed off for six decades. Western sanctions have forbidden most business dealings with the Burmese, even with citizens that have no direct links to the men in charge.

The country now appears poised to open up, exposing an untapped market to the world. 

Still, this Reuters report offers an equally compelling list of reasons to avoid Burma. 

Ready?

1. Burma's current currency regime "deters investment and abets kleptocracy."

2. An unimaginative populaton cowed by fear: "People have had beaten into them not to take the initiative," an aid worker told Reuters, "not to be creative, not to be innovative."

3. Mysterious state revenue figures: "State revenue is grossly underestimated and some critics say it is likely vast sums of that money was kept off the books and quietly smuggled out of the country into offshore banks held by cronies of the former junta."

And, according to a Harvard development guru writing in the Democratic Voice of Burma, the coming wave of "development" could very well fail to trickle down to the massive numbers of Burmese scraping by on less than $1 a day.

Here's Harvard's Elliott Prasse-Freeman on Burma's challenges: 

Development is here the sacred object, led by ‘experts’ from outside who could (perhaps unwittingly) usher in a quasi-authoritarian neoliberalism where key social and political decisions over the future of the economy and its development would be quarantined in the hands of a narrow elite.

http://www.globalpost.com/dispatches/globalpost-blogs/the-rice-bowl/investing-burma-brace-pain